The
Benefits of Professional Association MembershipProvided
by the career experts at Robert Half

Given the number of responsibilities
that you juggle on a daily basis, joining a Professional organization may not be
one of your top priorities. After all, what businessperson has time for more meetings and activities?

But such thinking can cause you to
miss out on the numerous benefits that membership in a professional association offers.
Whether you join an industry-specific group, a special-focusorganization (for women entrepreneurs
or small-business owners, for example), a neighborhood
based merchants’ association or the local chapter of a national trade
organization, you’ll make valuable professional contacts and
gain access a wealth of useful information.

Basic Benefits

Although each organization has its own
unique advantages, most professional associations offer some or all of the
following basic benefits:

Exclusive online
resources.
The websites of most professional associations have "members-only” sections that provide
access to a variety of databases and message boards, as well as list-serv subscriptions so
that you can be notified via e-mail about upcoming events and special activities that may not be
open to the general public. Some feature content on a variety of topics, such as running a business,
advancing your career or boosting your technology expertise.

Networking
opportunities. When
you join a professional organization, you’ll deepen existing business relationships and
make new contacts on a regular basis. Such networking goes beyond the exchange of business cards –
as you attend periodic meetings, become active on a committee or take a prominent
leadership role, you’ll forge lasting ties with others who have common professional interests and
similar business concerns. These relationships will be a rich, ongoing source of inspiration and
ideas.

Education.Many professional
associations offer their members the chance to update their knowledge of business and trade
basics or acquire new skills through seminars, workshops, break-out sessions at conferences and
online courses. Typical subject matter can run the gamut from tax tips and small business
financing to advice about hiring and staff management.

Free or discounted
publications.Membership
in many groups includes a free subscription to the organization’s
magazine. Some associations also offer their members free publications and discounts on CDs,
journals, videos/DVDs and other materials.Conferences and
seminars.Members
are often given priority registration for their organization’s convention and may
receive discounts on conference fees or special rates on related expenses, such as hotel
reservations and car rentals.

Beyond the Basics

Depending on the organization, there
may be additional benefits beyond those listed above. Some organizations, for
example, offer access to capital for members looking to grow their businesses. Other less tangible
but equally important benefits can include:

Support system.Members of
professional associations can often take advantage of formal coaching or mentoring
relationships with more experienced businesspeople who provide guidance and useful insights. Even on
an informal basis, such relationships can be a source of answers and solutions when you’re
facing a challenging situation in your business. At the very least, the feeling that you have a
support network behind you can boost your confidence when problems arise.

Political clout.Large national
organizations often have committees to track federal and state legislative developments that
could have an impact on their specific business or industry. Such organizations have a significant
political presence that far exceeds that of individual members. Joining this type of
professional organization enables you to tap into the group’s political influence and resources.

Civic leadership. As an individual
businessperson, you may not have the time or resources to sponsor a charitable
event, partner with an educational institution or otherwise participate in community activities.
But if your professional organization is active in civic and philanthropic ventures,
you can become involved in many worthwhile projects. Associations contribute to their
communities in a variety of ways, from providing scholarships and hosting career days for students
to supporting important charitable causes.

Joining a professional
organization is beneficial for your own professional development and the future of your
business. The connections you’ll make, the resources made available to you and the ideas and
advice you’ll discover represent an outstanding return on what amounts to a modest, manageable
investment of time, money and effort. It could turn out to be one of the best things you could do
for yourself and your business.

Robert Half International
was founded in 1948 and is traded on the New York Stock Exchange. Its financial
staffing divisions include Accountemps, Robert Half Finance & Accounting and Robert Half Management
Resources, for temporary, full-time and senior-level project professionals,
respectively. The company has more than 360 staffing locations in North
America, South America, Europe and
the Asia-Pacific region, and offers online job search services on its divisional websites, all
of which can be accessed at www.rhi.com.

Robert Half International was founded in 1948 and is traded on the New York Stock Exchange. Its financial staffing divisions include Accountemps, Robert Half Finance & Accounting and Robert Half Management Resources, for temporary, full-time and senior-level project professionals, respectively. The company has more than 360 staffing locations in North America, South America, Europe and the Asia-Pacific region, and offers online job search services on its divisional websites, all of which can be accessed at www.rhi.com

How to Write an Effective Job Description

As a management tool, the job description is extremely important. A well-written job summary can mean the difference between a successful hire and a hiring mistake. Fortunately, you can avoid the most common pitfalls and carefully outline the requirement of a position using the following approach.

Analyze Before You Write

Sometimes the very act of writing the job description can tell you whether or not a given set of tasks requires a full-time person. You may find that you can assign the duties to one or more people on staff. If you decide you need to hire a new employee, the next step is to identify essential tasks and responsibilities. One common mistake managers make when writing or updating a job description is to simply generate a "laundry list” of duties without carefully reviewing the position.

· What specific duties will the employee perform on a daily basis?

· Which are primary versus secondary?

· If the employee will supervise others, what will be the extent of his or her authority?

· What are the other reporting relationships, and with whom?

· For what critical outcomes or results will the employee be accountable?

The answers to these questions will help you develop your hiring criteria – the mix of qualifications, skills and traits that are necessary for a candidate to be successful in the position. Avoid blurring these distinctions. "Qualifications”are those attributes the candidate must have in order to perform the job, such as previous experience, certification or other credentials. "Skills” are the competencies, like computer literacy, that the prospect must possess. Qualities that are less tangible and quantifiable – like personality, work style and attitude – are "traits”. The criteria you establish will be indispensable when you're screening resumes and arranging interviews. This is particularly important when there are a high number of candidates.

Your hiring criteria can help you eliminate those who are "almost” a fit and allow you to quickly identify the single most qualified person. Elements of the Job Description

After reviewing the position and detailing your criteria, you'll draft the job description. Keep in mind that a good description will not only attract the best person but also serve as guide for evaluating candidates and a benchmark for the new hire's progress. In general, the description should be practical, functional and clearly written. It should start with the title of the position, followed by the department and to whom the position reports. Next is the statement of overall responsibility – no more than three sentences summarizing the general nature, function and purpose of the job. Then list the primary tasks and responsibilities connected with each essential activity the candidate will be expected to perform.

Follow this with a list of the secondary tasks. After this "nuts and bolts” section, you can describe the skills and attributes necessary for success in the position. This is where you should include items such as"strong organizational skills,”"ability to lead a work team” or "must work independently.”Then list other requirements, including education. Salary is another important component of the description. By factoring in the necessary education, training and experience, as well as the cost of living in your area, you should be able to come up with a realistic salary range.

There are a variety of resources that can assist you, including recruiters, salary surveys such as Robert Half International's 2008 Salary Guide (order your free copy at www.roberthalf.com), career centers and websites. Although you may be under pressure to fill a vacancy quickly, keep in mind that a thorough job description will increase your chances of hiring exactly the right person.

In my previous two articles, I suggested that the keys to creating distinctive value – and competitive advantage - in the marketplace were as follows:

Clearly identify your target market

Specialize to increase your value

Differentiate yourself from your competition

Many professionals try to skip this process and try to market their services without really being clear about what they are selling and why clients should buy from them. This makes marketing and selling uncomfortable, ineffective and frustrating. On the other hand, if you have chosen work that you are passionate about, have narrowly defined your target market and are confident in the value that you have to offer to your target market, then you have the building blocks for a successful and rewarding practice. As importantly, you will have developed the makings for a story that prospective clients in your target market will be eager to hear about.

Think about it from your prospective client's perspective. In the case of bookkeeping services, most clients will assume that you have the technical competence to help them. What they really want to know is why they should buy from you rather than your competition. If you have followed the process outlined in in my previous articles, then you have done their research for them and are in a position to make their buying decision much easier. Using your personal business story you can illustrate quickly and concisely the unique value that you have to offer and why they should buy from you rather than your competition.

The next step in practice building (marketing) is to create your personal business story and look for opportunities to tell it. If you have created "something worth selling”, then this part is fairly straightforward. If you skimmed through that part, then this step will likely be difficult and challenging.

Building Your Story

Each and every professional will develop - over the course of his or her career – a personal business story. Your personal business story is your answer to the question:

"So, what do you do for a living?”

Like any story, your personal business story can be good or bad, and as a result, it can attract or repel clients. If you have followed the process outlined in my earlier articles, then you will have all the content you need for a great story that prospective clients will want to hear.

Consider the following two examples of answers to the above question:

I am a bookkeeper with Acme, Boxes and Crates, or

I help restaurant owners sleep better at night knowing that their bookkeeping is being looked after and that their relationship with the CRA will be a good one.

Which do you think would be more likely to generate interest? Which do you think would more likely result in a follow up question like "that sounds interesting – can you tell me more?”

Each personal business story should have any or all of the following elements:

The story can:

Identify your target audience

Describe the unique value that you have to offer your target market

Describe the unique skills, expertise, and experience that make it possible for you to deliver this unique value to your target market

Provide independent, verifiable evidence of the value that you deliver such as client stories and testimonials, or third party reviews of your services.

The next step is to create and package your story so that you can use it in a variety of different circumstances.

Different versions of your story

To ensure that have an appropriate story to fit each marketing situation, you need to develop different versions of your story. You will likely need different versions for your business cards, your letterhead, your web site, your fax cover page, articles you write, and presentations that you deliver. Each will vary in length and content, but each will carry essentially the same message: if you are in my target market, this is why you should buy from me.

Perhaps the two most important versions of your story are your "one-liner” and your "elevator pitch”.

Your one-liner will generally be your first answer to the question, "So, what do you do for a living?” This version will likely be less than 25 words and will be used at every networking event you ever attend. It is arguably the most important marketing tool you will have. If you have a great answer to this question, you will notice a strange thing starts to happen - you begin to enjoy and look forward to networking events. If you have an interesting story to tell, you look forward to sharing it.

Now, when someone asks you for more detail (as they will if you have a great one-liner), you need a 30 second "elevator pitch”. This version builds on your "one-liner”, providing more detail, but still leaves them interested in more information about your business. Be prepared to provide them with your card, your website, additional information, or some way to contact you.

Tell Your Story As Often As You Can

Marketing professional services - like bookkeeping - is a "contact sport”. The most effective marketing opportunities are the ones that allow the greatest face-to-face contact with people in your target market. Every professional will want to have business cards, nice letterhead, a website, a brochure, and some nifty handouts - these are great marketing support. But consensus among the experts is that the most effective aspects of marketing professional services are demonstrating expertise and building credibility and trust. This can really only be done by building personal relationships, which require personal contact.

What the experts say…

In his book "Managing Professional Services Firms” David Maister provided a listing of

Marketing Tactics in Descending Order of Effectiveness:

First String

o Seminars (small scale)

o Speeches at client industry meetings

o Articles in client-oriented trade press

Second String

o Community / civic activities

o Networking with potential referral sources

o Newsletters

Clutching at straws

o Publicity

o Brochures

o Seminars (ballroom scale)

o Direct mail

o Cold calls

o Sponsorship of cultural / sporting events

o Advertising/Video brochures

If Maister was writing his article today, I'm sure most social media would be in the "Clutching at straws” group, but blogging might be up there in the "first string”. Blogging is more like article writing and can help you establish yourself as an expert.

Like any good strategy, the strategy or combination of strategies that you choose for delivering your marketing message depend primarily on what you are trying to achieve or more specifically, the nature of your marketing problem. Setting specific goals and objectives will allow you to select the marketing methods that will result in the best success.

In her book Get Clients Now! A 28 Day Marketing Program for Professionals and Consultants[iii], C.J. Hayden proposes that marketing strategies will have varying success depending on their degree of human contact. Hayden generally lists the order of effectiveness as follows:

Direct contact and follow up

Networking and referral building

Public speaking

Writing and publicity

Promotional events

Advertising

However, she also says that most professionals will require a mix of the above strategies and that the strategy that you choose to focus on at a particular point in time will depend on the nature of the marketing problem that you are having at that time.

At the end of the day, marketing professional services is more of an art than a science. Different bookkeepers will find different combinations of marketing activities that work well for them. Ford Harding's book "Rainmaking: The Professionals Guide to Attracting New Clients[iv] is one of the better overviews of most of the common marketing activities used by professional service providers.

Conclusion

As the bookkeeping industry becomes increasingly competitive, it is becoming difficult to succeed in building a practice without a clear personal business strategy and some level of marketing skills and abilities. Certainly, there are additional strategies that professional bookkeepers can use to improve their ability to attract and retain clients. These include developing systems and processes to improve lead generation, project management and client satisfaction.

However, successfully mastering the two main keys to practice building as outlined in this article is the first step.

Create something worth selling (covered in my last two articles)

The first key to building a successful practice is building a clear business strategy. This requires (1) targeting a specific market niche or client base, (2) specializing to increase the value that you can offer your target market, and (3) differentiating to set yourself apart from your competition through innovation in service delivery and the way that you package and price your services. If done well, developing these three elements of your business strategy will provide you with the building blocks for a successful, profitable and rewarding practice.

And a Story Worth Telling (covered in this article)

Becoming clear about who you can help and what you can do for them, helps define your personal business story that prospective clients will be eager to hear.

Once you have developed your story, you need to practice, and look for opportunities to tell it often. Focus on marketing strategies that will give you the most personal contact possible with your target market.

The key to building a successful thriving professional practice is starting with a personal business plan that tells a great story. Why not get started now?

Gordon Holley, CA, CFP, CPB

Gordon Holley is an entrepreneur at heart. He's worked as a CFO advising start-ups, as a law firm Chief Operating Officer, and as a partner in a CA firm. While working in public practice in small, mid-size and "Big 4” CA firms, Gordon got a real insider's look at how bookkeeping affects both accountants and small business owners. In all his roles, he has demonstrated a keen eye for business opportunities.

Now, as President and CEO at Bookkeeping Express, he brings hard-won experience and insight from more than 20 years in accounting and financial services to his own bookkeeping franchise company. As a business owner, Gordon can now focus on the work he enjoys the most, like connecting with small business owners and accountants, and helping other bookkeepers grow their own successful bookkeeping businesses.

Gordon is a Chartered Accountant, a Certified Financial Planner, a Certified Professional Bookkeeper, a Certified QuickBooks ProAdvisor and a Simply Accounting Gold Certified Consultant. He is a member of the Institute of Professional Bookkeepers of Canada (he is currently President of the IPBC), the National Association of Certified Professional Bookkeepers (US) and the American Institute of Professional Bookkeepers (US). Gordon brings years of experience participating on non-profit, professional association boards, including the Vancouver Association of Legal Administrators and the Canadian Society for Marketing Professional Services.

[i] See discussions in The Frog and Prince: Secrets of Positive Networking To Change Your Life
by Darcy Rezec, Judy Thompson, Gayle Hallgren and Reinventing Work: The Brand You 50 by Tom Peters (New York: Alfred A. Knopf, Inc., 1999)

[ii] Managing the Professional Service Firm by David Maister (New York: The Free Press, 1993) P.122

[iii] Get Clients Now! A 28-day Marketing Program for Professionals and Consultants by C.J. Hayden (New York: American Management Association Publications, 1999) P.9

Differentiation – Another great way to make more money and become a client magnet

by Gordon Holley, CA, CFP, CPBPresident & CEO, Bookkeeping Express

So in Part I of this article last month, we talked about how to select a specific target market and how to specialize so that your value increased in the marketplace. As promised, Part II of this article which follows deals with differentiation – another way to increase your value in the marketplace. So, how can I differentiate myself from my competition so that prospective clients choose me rather than my competition?

In a crowded market place, it is difficult to be successful selling the same thing as everyone else. Successful differentiation strategy attempts to answer the question "Why should my prospective clients buy from me rather than from my competition?” Successful differentiation strategy can be based on the nature of the services offered, the service delivery, or the packaging and pricing of the services.

Nature of Services

As discussed in Part I, many bookkeepers differentiate themselves through targeting a specific target market and through specialization. In most cases, this results in a type of boutique firm offering a limited number of services to a select target market. In some cases, these firms are expanding the services they offer to include consulting or are bringing in additional specialists to be able to offer one-stop shopping to their clients in particular industries.

Service Delivery

Bookkeepers can also create competitive advantage relative to their competition through better service delivery. When asked, most bookkeepers will say that they offer great client service. As a result, client service is seldom a differentiating factor between firms. However, some professional services firms - like lawyers and accountants - have successfully differentiated themselves in this manner by offering client satisfaction guarantees. Ungaretti and Harris in Chicago is an eighty-lawyer law firm that was one of the first to offer its clients satisfaction guarantees. The Summit Law Group in Seattle offers a client satisfaction guarantee with a unique twist – all of their invoices have a "Value Adjustment” line that allows each of its clients to adjust the invoice to reflect the value they feel they have received. Bookkeepers would do well to follow these examples.

If you are going to offer service guarantees, you need to have training and policies and procedures in place so that all clients feel like they are getting extremely good value for money. This takes time and energy to implement and refine, but has a huge payoff in the long term. It makes marketing much easier when you can say that you offer a 100% money back satisfaction guarantee. We do this with our firm today and have been doing it for four years – not one client has ever asked for their money back.

Packaging and Pricing

More and more firms are also differentiating themselves by packaging and pricing their services in new and innovative ways. In 2002, the American Bar Association produced the ABA Commission on Billable Hours Report that examined hourly billing practices and reviewed some alternatives that might help provide clients with better value and increase client satisfaction. One of the appendices to the report contains an excellent bibliography of resources on the topic.

In fact, in the report, the President of the American Bar Association at the time went so far as to say that hourly billing was killing the legal profession. He suggested strongly that the whole legal profession should implement alternatives to hourly billing in order to increase client satisfaction and perception of value.

There is no reason that bookkeeping should be any different. Many bookkeeping services can be offered on a flat-fee or value billing basis. This allows clients to know how much there bill is going to be every month and many are willing to pay a higher price in order to have that kind of peace-of-mind.

Ron Baker is the self-proclaimed evangelist for ridding the accounting profession of the billable hour. According to Accounting Today, he is one of the 100 most influential people in the accounting industry.

The Professional's Guide to Value Pricing, by Ron Baker is an excellent reference on value billing in the accounting industry – which is obviously very similar to the bookkeeping industry. It's a very long read though, and a very expensive book (around $100).

The easiest read on the subject I've ever come across is Ron Baker's "Burying the Billable Hour”.

Final thoughts on differentiation

In addition, to be really useful, components of differentiation must be demonstrable. Many suppliers will tell you that they are the best, without telling you why. Since there is no easy way to verify statements like this, there is usually little value in making them. Independent third-party reviews, peer referrals and client testimonials provide a much higher degree of persuasive ability.

Real differentiation is conscious and intentional - you want to distance yourself from the pack in order to make it easy for your target market to find you and choose you over the competition.

Useful questions to consider in building competitive advantage through differentiation include:

How many bookkeepers or firms are already offering the types of services that I am contemplating to the target market that I am after?

How can I stand out from that crowd through thought leadership in my area of specialization? ·

How can I stand out from that crowd through innovation in service delivery? ·

Can I package my services in innovative ways that makes it easier for clients to buy from me? Service delivery and client satisfaction / Pricing strategy

Can I price my services in ways that make them more attractive to clients and more profitable for me?

Am I already a leader in the marketplace? By whose standards? ·

Can I enter into strategic partnerships or relationships that will allow me to offer more value to my clients?

Answering questions like these, and building the answers into your business plan, can help you differentiate yourself in the marketplace and help clients easily choose you over the competition. And they can also help you increase prospective client's perception of the value you offer which makes it easier to increase your fees (notice I said "fees” rather than "hourly rates).

So now that you understand how to select a target market, specialize to offer specific value to that target market and differentiate your firm so that you stand out from your competition, we are ready to discuss marketing and advertising.

Many people try to start advertising and marketing a product or service that is just like everyone else's – and guess what – it doesn't work very well. By creating something worth selling first (targeting a specific market, specialization, differentiation), you make your marketing and advertising time and money significantly more effective – because you will stand out from your competition – all you have to do is get the word out. If you get the word out about a firm that doesn't stand out from the competition, you don't give prospective clients any reasons to choose you.

So the most effective strategies for advertising and marketing bookkeeping services will be the topic of my article next month. Talk to you then.

Specialization – A great way to make more money and become a client magnet

by Gordon Holley, CA, CFP, CPB

President & CEO, Bookkeeping Express

In his book True Professionalism: The Courage to Care About Your People, Your Clients and Your Career, David Maister asked the following rhetorical question: "Why spend the majority of your professional life working on tolerable stuff for acceptable clients, when, with some effort in (for example) client relations, marketing, and selling, you can spend your days working on exciting things for interesting people?"

Let's start with a few questions to see if specialization is something you might be interested in:

· Have you always wanted to be a "Jack of all trades – and master of none”? Or would you prefer to be a highly skilled, highly priced specialist?

· There are approximately 42,000 self-employed bookkeepers in Canada. Would you like to compete with all of them, or would you like to provide services that none of them can match?

· Would you like to be able to charge higher rates than bookkeepers around you, or have to keep your rates in line with everyone else?

There are many excellent books on business strategy and marketing today – and many of them deal specifically with professional services. A common message in most of these works is that there are two keys to building a professional practice: first - you have to build something that clients want to buy and then second - you have to let them know what you have to offer.

Unfortunately, many professionals try to market their services without first becoming clear about the unique value that they have to offer in the market place and why clients should buy from them rather than from their competition. Unless they are armed with this key knowledge, any marketing efforts they undertake are likely to be both ineffective and uncomfortable.

Ok, so you get the point. The more you specialize (assuming you pick a good specialty), the more valuable you become and the easier it is to get clients. The converse is also true - less you specialize, the less valuable you are in the marketplace and the harder it is to attract new clients.

So… build a better mousetrap…then tell the world about it!

Many bookkeepers would rather do anything but marketing and selling, while some bookkeepers thrive on marketing. The difference between the two seems to be this: those that have a good story love telling their story. Those that don't have a good story would prefer to do just about anything else other than marketing.

In some ways, building a bookkeeping practice is not dissimilar to selling mousetraps. We all know the famous saying "build a better mousetrap and the world will beat a path to your door”. The same is true for building a bookkeeping practice. A lot of bookkeepers offer similar services to the public. The more they are alike, the more difficult they find attracting new clients. On the other hand, bookkeepers who specialize and offer unique value will stand out and seldom have to spend much time actively marketing – clients will go out of their way to find them.

The keys to creating distinctive value – and competitive advantage - in the marketplace were as follows:

Clearly identify your target market

Specialize to increase your value

Differentiate yourself from your competition

We'll deal with the first two of these in this article. The third one will have to wait until the next newsletter due to space constraints (and it never hurts to leave you audience wanting a little more).

So, who is my target market?

Targeting increases your ability to compete and the effectiveness of your marketing. If you try to be all things to all people, you will likely be perceived as provide little value to anyone. On the other hand, if you offer a specific service to a specific client in a specific industry, you have the potential to be extremely valuable to that client. Most professionals opt for somewhere in between these extremes. You want to be targeted enough that you can offer specific value, and diversified enough that you are not economically dependent on one client, one area of practice or one industry. Having said that, most professionals would benefit from having a more targeted approach.

Choosing the right target market results from reconciling two important perspectives: first, "What do I want?” and second, "Which clients can I create the most value for?” The first often involves some introspection and personal planning. Getting clear about your personal and career goals and objectives is the starting point for this. The second perspective involves clearly identifying your current skills and abilities and experience. In many cases, answering the first question early in your career will lead you to develop the specific skills, abilities and experience throughout your early career that will help you become more valuable to your chosen target market.

The following are the types of questions that need to be answered in determining your target market. The clearer you are about the answers to each of these questions, the easier it will be to define the value you have in the market place and the greater your confidence in selling that value.

· What am I passionate about in life? · When I am not at work, what do I enjoy doing? · What kind of work do I want to do? · What kind of clients do I want to work with? · What industry are my prospective clients in? · Who can I offer the most value to? · What do I want to be famous for? · What kind of work would I do for free? Think about specializing in an industry:

Based on a recent study, the following percentage of accounting firms provide services to these types companies:

• Professional services firms, such as lawyers (83%)

• Not-for-profit organizations (51%)

• Construction (69%)

• Wholesale distribution (37%)

• Medical offices (68%)

• Hospitality (28%)

• Retail (64%)

• Transportation (15%)

• Manufacturing (51%)

• Governmental contractors (13%)

Each of these industries has unique needs with respect to bookkeeping, sales taxes, and payroll. Some use point-of-sales systems, some have unique issues in their industry that many bookkeepers aren't aware of. If you become the best in your city at servicing those needs, your name will get around, you will start getting referrals. Pretty soon, you'll become known as the expert in your industry of specialty and you'll never look back.

Or, specialize in a skill set

Some bookkeepers specialize in bookkeeping software. For example, some become QuickBooks Certified ProAdvisors or Sage Simply Certified Consultants (Bronze, Gold, Platinum) or Sage Certified Trainers. Some have developed specialties in reporting with Sage Simply Accounting Intelligence or one of many reporting packages in the Intuit Marketplace. Some are experts with specific modules like inventory, Point-of-sale systems, or Customer Relationship Management systems. There is no end to the number of possible specialties.

The following questions can be used for identifying and prioritising the specific needs of your target market, thus helping you determine what specialized services you can provide:

· What keeps my target clients awake at night? · How can I help my target clients solve their biggest problems? · What skills do I need to develop in order to be better able to help my target clients solve these problems? · How else can I become more valuable to my target clients over time? · In addition to the legal services that I provide my target clients, are there additional complementary non-legal services that I could offer that would increase the value we can provide?

Usually, specialization grows from experience. Sometimes you start with, say, one restaurant client. Then, that restaurant client refers to you a friend of theirs, who also owns a restaurant. Take on two or three more restaurants, and you've got more restaurant experience than just about anyone in your town.

Specialization can also be chosen consciously. Some bookkeepers decide on a specialty – maybe they worked in a particular industry before going out on their own. Maybe they just knew that they wanted to specialize in a particular industry. Either way, they ended up with a specialty and are now in a position to make use of it.

So, now that you've chosen your target market and decided to specialize, how do you turn your experience and knowledge into more money and a magnet for clients? Well, you need to differentiate yourself from your competition and then get out there and establish yourself as the "go-to-guy or girl” in your specialty. And how do you do that? This will be the topic of the next newsletter.

Continuing on our theme of helping bookkeepers make more money, work fewer hours and have more fun in their practice, we need to talk about leverage. According to David Maister, the Professional Service Firm guru, the most effective ways to increase your profit (without simply working more hours – and who wants to do that?) are to increase your margin (raise your rates and fees) or increase your leverage.

In my last article in August, I talked about increasing your rates. Increasing your rates makes sense in your client's eyes if you can become more efficient, or if you can provide more valuable services. The best way to increase your value is to take more courses, become a Certified Professional Bookkeeper (if you haven't already), or increase your level of certification on QuickBooks or Simply Accounting. Put together a professional development program that includes increasing your knowledge of technology (check out Alan Salmon's cross-country technology tour) so that you can take advantage of recent technology to become more efficient and reduce your administrative time managing your practice. Take courses through the Knowledge Bureau and begin to add additional services to your repertoire, such as controllership services, business advisor services or wealth management.

You can also increase your rates if you increase your leverage (a double whammy for profit). If you can hire a less experienced employee or independent contractor to do the low-end work like data entry and reconciliations, you can spend your time offering higher value-added services like reviewing their work and offering consulting or other services.

Leverage also lets you make money from someone else's work. For every hour they work, you make money - even if you are lying on a beach or spending time with your family. It actually makes some sense, even to those working for you, because you had to invest in growing your client base (which many inexperienced bookkeepers find very difficult to do), and developing your systems and training. In any event, once your junior bookkeeper is trained and you have more clients, you can start working less and make money whenever your juniors are working.

Ok, so everyone one likes the idea of making more money, now comes the hard part - implementation. Many senior bookkeepers have tried to hire junior bookkeepers but have had a very difficult time keeping them. Senior bookkeepers invest lots of time growing their client base, training new employees, only to have the new employees leave to start their own practice - often taking some of the senior bookkeeper's clients with them. Many senior bookkeepers that I have talked to have tried hiring employees many times, but after the third or fourth junior bookkeeper left, they gave up and resigned themselves to doing all the work themselves again.

So the $64,000 question is how do we - as great senior bookkeepers - keep good junior bookkeepers. Well, the answer is the same as how you keep great clients: you provide them with great value. For clients, great value is in providing accurate, efficient bookkeeping, meeting deadlines and regular and prompt communication. For junior bookkeepers, the value is in great administration systems, good clients and great training and mentoring programs. If all you are providing to your junior bookkeepers is training, then eventually they will likely go off and start a practice of their own. However, if you invest in technology, in developing great systems and in acquiring great clients, they will have less reason to leave and will be more inclined to stay.

Also, you can increase the likelihood of junior bookkeepers staying if you interview them well at the outset and get a sense of what their long-term goals are. There are many junior bookkeepers that don't want to be business owners. They like the relatively low stress data entry and reconciliation tasks and would be content to do these for years. Others only want to use your business as a stepping stone on their way to learn all of your secrets and eventually starting and building their own business. The trick is to understand the difference and hire the ones that really enjoying the data entry and reconciliation work. This is harder than it seems, but not impossible.

We can learn a trick or two from the franchise industry. Leading edge franchisors are now using "profiling" to select new franchisees. They need to be able to identify those prospective franchisees that are entrepreneurial enough to grow their businesses, but are also able to work within the systems that the Franchisor has developed without trying to change them. There are some great "profiling" companies now that provide tools like extensive questionnaires that allow you to more fully understand whether a potential employee is likely a good long-term employee or is more likely to be entrepreneurial.

The easiest way to create leverage without having to hire and train junior bookkeepers is to outsource to a bookkeeping company who provides data entry and reconciliation services. There are a number of these who use employees in other low-cost countries, but I suspect that there are also a few that use junior bookkeepers in Canada or the US. If you can't find one in Canada, maybe there is a business opportunity for you. If you got good at developing great and efficient systems and hiring and training good junior bookkeepers, maybe you could start a company like this and offer data entry and reconciliation services to other bookkeepers and accountants.

Regardless of how you get it, along with raising your rates, increasing your leverage is one of the best and most effective ways to make more money, work fewer hours and have more fun in your practice. Start getting more leverage now. Hire a junior bookkeeper as an independent contractor on a part-time, hourly basis and start getting them to do data entry and reconciliations. As time goes on, build your administrative infrastructure; training systems and client acquisition systems and you should be able to keep your staff around for a long time.

Gordon Holley, CA, CFP, CPBPresident & CEOBookkeeping Express

Gordon Holley is an entrepreneur at heart. He’s worked as a CFO advising start-ups, as a law firm Chief Operating Officer, and as a partner in a CA firm. While working in public practice in small, mid-size and "Big 4” CA firms, Gordon got a real insider's look at how bookkeeping affects both accountants and small business owners. In all his roles, he has demonstrated a keen eye for business opportunities.

Now, as President and CEO at Bookkeeping Express, he brings hard-won experience and insight from more than 20 years in accounting and financial services to his own bookkeeping franchise company. As a business owner, Gordon can now focus on the work he enjoys the most, like connecting with small business owners and accountants, and helping other bookkeepers grow their own successful bookkeeping businesses.

Gordon is a Chartered Accountant, a Certified Financial Planner, a Certified Professional Bookkeeper, a Certified QuickBooks ProAdvisor and a Simply Accounting Gold Certified Consultant. He is a member of the Institute of Professional Bookkeepers of Canada (he is currently President of the IPBC), the National Association of Certified Professional Bookkeepers (US) and the American Institute of Professional Bookkeepers (US). Gordon brings years of experience participating on non-profit, professional association boards, including the Vancouver Association of Legal Administrators and the Canadian Society for Marketing Professional Services.

In The Forum is a regular column that summarizes a popular topic discussed in the forum at some time in the recent past. Every bookkeeper knows that what you learn in the classroom doesn't always translate to the real world.The IPBC Forum is a place where peers assist each other and share their knowledge.

As expected, forum posts slowed down during the summer. It is good to know that self-employed bookkeepers do take time off for rest and rejuvenation.

Seventy-one new topics were started between June 19 and August 18. Eleven of these were very popular. The most viewed topic continued to be virtual bookkeeping.

The next popular topic had to be mined. Once I combined / grouped four similar categories or topics – becoming a self-employed bookkeeper, training for preparing income tax returns, client management systems, best filing practices; I’d say practice management is beginning to be discussed in the forum.

The third group of topics that rose to the top related directly to bookkeeping - business structure, how to change your corporate fiscal year-end, shareholder loans, inter-company transactions, and what is the definition of a receipt for CRA purposes.

Becoming A Self-Employed Bookkeeper is not an Easy Transition

As I reviewed the recent forum activity, the topic that jumped out at me was making the jump to a self-employed bookkeeper.

The forum replies were excellent. Here is a sampling:

- Be prepared for some lean times the first year or two.

Have some kind of backup financial support in the form of a full or part-time job and/or financial support from your spouse or family.

- It is not as easy as it looks.

The freedom is accompanied with risks;

There are no paydays or paid statutory holidays;

More time is spent on collections than anticipated;

Specializing in an industry reduces stress and helps you remain competent; and

It is difficult to keep current on everything.

- It is a steep learning curve from being an AR/AP data entry employee to self-employed public practice.

Consider baby steps such as switching jobs to an accounting or bookkeeping firm to learn under supervision and receive mentoring.

As one experienced bookkeeper said, "You don’t know as much as you think you do."

- Research and have in place your office management system BEFORE you start. Don’t think, "I’ll figure it out as I go along." Here a few things to consider:

Don’t use sales tax funds to finance your business or personal lifestyle.

What Wasn't Said In The Forum

I would like to add two points not covered in the forum discussion …

There is no IT department. I’ve lost days when a simple software upgrade doesn’t go as smoothly as it should have.

You need to be honest about your skill level. Do you really have the skill set to be a self-employed full-charge bookkeeper at this time?

As a bookkeeper,be cognizant that you could assist a business to fail if your technical bookkeeping skills are inadequate… and it is possible that this is only discovered in an audit three or four years down the road when it is too late to fix. Penalties, interest charges and back taxes can kill a business and create financial problems for the owner many years into the future.

IPBC's Forums offer a wealth of information and support to bookkeepers.You can market it to clients showing you have a support system and network to rely on when you need help or answers to their questions. Why not become a member now and experience for yourself the benefits of membership?

The information and materials in this column are provided for general information purposes only and are not intended to constitute legal, accounting or tax advice or opinions on any specific matters. Laws and regulations change frequently, and their application can vary widely based upon facts and circumstances involved. You, and not IPBC or Lakeshore Bookkeeping Services, are responsible for the applicability and accuracy of information as it relates to your specific situation.

This column is written by Laura Kenway BComm CPB dba Lakeshore Bookkeeping Services. She provides free of charge at Bookkeeping-Essentials.com, an online Small Business Accounting Resource dedicated to supporting work from home business owners who do their own books.

As mentioned in my previous article, inventory is complex. If you’re working with a client to create better control and management of their inventory, one of the first considerations is deciding on the most effective system for their needs.

For ease of explanation, this article is based on a company purchasing goods and held for resale and is based on Accounting Standards for Private Enterprises (ASPE). In actuality, inventory may also include spare parts, servicing equipment, raw materials, work-in-progress (WIP), and finished goods to name just a few.

A perpetual inventory systemis a continuous record of inventory changes.

These changes are maintained within the Inventory control account and subsidiary ledger. Concurrently, the cost of goods sold (COGS), are recognized at the time of each sale.

In addition, the debits/credits occur within the inventory account instead of using a purchases account. For further consideration, an Inventory Over and Short account is used to make adjusting entries if necessary. This is useful as the option to close to COGS in the event of human error.

The other option is to report in Other Revenues & Gains or Other Expenses & Losses; this option would be used in the event of shrinkage, breakage, theft, or other loss; gross profit does not become distorted.

Periodic

A periodic inventory systemis a system that maintains a set inventory dollar amount.

All purchases during the period are accounted for in a purchases account rather than the inventory account.

The inventory amount recorded in the inventory account changes periodically, normally after a physical count or through an acceptable estimation (such as the retail estimation method) to determine the ending inventory.

It’s important to note that the COGS is a residual amount, its determination is based on:

Cost of Goods Available for Sale - Ending Inventory = Cost of Goods Sold (COGS)

As well, an Inventory Over and Short account is not used -- any adjustments are buried within the COGS account.

Modified Periodic

Under periodic, some companies use what’s known as a modified periodic system.

A modified periodic systemis one that combines the accounting of inventory for financial purposes using the periodic system and tracks the quantities of inventory (not dollar amounts) using a perpetual system. Whether the quantities are tracked manually or within a software program, the records are used to determine inventory levels at any point in time.

Four Main Inventory Issues

There are four main inventory issuesthat need to be answered before you can determine the cost of inventory.is a system that maintains a set inventory dollar amount.

1. Which physical goods should be included?

Determine who owns inventory still in transit, inventory on consignment, and whether there are any special sales agreements in place such as buy-backs, high rates of return or delayed payment terms.

2. What costs should be included?

Section 3031.11 states: "The cost of inventories shall comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition."

Purchase discounts, vendor rebates, basket purchases and joint product costs are all areas that will require investigation to determine if they apply. Storage and interest expenses also require investigation as these have different reporting requirements depending on the situation.

3. Which cost formula should you use?

Specific identification, FIFO, or weighted average cost.Specific identificationThe FIFO formulaWeighted average or moving-weighted average costing

Once a cost formula is determined and applied, the accounting standards require that formula to be used consistently from period to period. Section 3031.23-26 provides further information.

is a method that perpetually averages the inventory based on the costs of requisition throughout the accounting period. It averages the inventory by taking into account the volume of goods purchased during each reporting period, and weighing those costs in relation to the volume purchased.states that inventory is accounted for on a first in, first out basis. The cost of the inventory will be based on the most recent costs to requisition.means that specific costs are attributed to segregated items of inventory for specific projects or that the inventory is not interchangeable. Using specific identification is not appropriate when there are large numbers of items in inventory that are interchangeable.

4. Finally, has there been an impairment in value of any of the inventory items?

This question relates to the value that should be reported on the balance sheet. CICA section 3031.10 requires that inventories shall be measured at the lower of cost and net realizable value.

Next Month - Inventory Part Three

Inventory part three, next month, will cover net realizable value (NRV), estimating inventory – retail and gross profit methods, as well as presentation and disclosures required.

Conclusion

As you can see, inventory is not as easy as it appears and there are many factors that impact the accounting of this significant asset. Like most areas of accounting, it is not black and white. Professional judgment comes into play and decisions made will have impacts on financial statements, ratios, as well as tax implications. I strongly suggest working with your clients’ accountant to make sure this asset is accounted for in a proper manner.

One final note: Regardless of choosing the perpetual or periodic system ... Performing (at minimum) an annual, manual, physical inventory count is a must!

Rhonda Jones, CPB lives in Whitby, Ontario, and previously owned, operated, and sold two successful businesses. She attended Durham College, Business Administration - Advanced Accounting program. Most recently, she started a business called Acromac, providing accounting and business solutions to small enterprises.

Rhonda has two daughters --All teenagers! (sympathy cards are appreciated). She recently discovered her great-great- grandmother was a milliner in France, explaining her love for collecting outrageous hats. In her free time, Rhonda can be found in her art studio creating, ah-hem, "masterpieces?!"

As you may know, the IPBC has had a section in their Newsletters lately called "Are You An Expert in Your Field?”. We have been looking for members and others to write articles for our newsletters and provide useful content for other members that would help them run better businesses.

I have volunteered to write a regular article with tips and ideas that bookkeepers can use to:

•Make more money;•Work fewer hours; and•Have more fun in their practices.

While I’m not sure that anyone, including me, can claim to be an expert in helping bookkeepers create more profitable, more enjoyable practices, I thought it would be great if we at least took a stab at accumulating great ideas and useful "best practices” and try to share them with our members.

If you have any ideas that you would be willing to share – things that have helped you in your practice - that you think would be useful to others, please send them to me (gholley at beankeepers.com) and I’ll try to incorporate them into future articles. Similarly, if you have any questions about running a more profitable, more enjoyable practice, by all means send them to me and I’ll try to answer them in a future article.

Tip #1 - Raise Your Hourly RatesSo much for the introduction – let’s get on to focus of this article: Raise Your Rates! No, really. Most bookkeepers do not charge enough for their time. They work long hours, provide great value to clients, but they don’t make as much money as they should because they are afraid to raise their rates.

This article focuses on raising hourly rates. My own personal bias is that most clients prefer flat fees - which I plan to discuss in a future article. So this article is for those of you who are still charging by the hour. In the balance of this article we'll talk about why you should raise your rates, how high you should raise them, how you should raise them to avoid complaints, and what you should do if one of your clients does complain.

Suggested Hourly Rate RangesWhile competitive rates will certainly vary by city and province, based on my informal research, I would like to suggest that the following ranges would be useful as a guideline:

I am aware of one accounting firm in Calgary that charges out their senior bookkeepers at $140 per hour. I know many small, medium and large accounting firms that charge their neophyte students (who know nothing about bookkeeping out at over $100 per hour). I am also aware of a number of bookkeeping/accounting franchises that charge $75 - $85 per hour (for a variety of skills levels). These are just a few examples of what the market will bare.

Reasons to Raise Your RatesThere are three rationales for raising your rates. First, prices increase as a result of inflation. Everything else gets more expensive every year, your dollars are worth less, and your clients should expect that your fees will go up every year (although you may have to train them) purely as a result of inflation.

If you haven't raised your rates at least 5% per year since you started bookkeeping, you are most likely not charging enough. Assuming 2% inflation, that is only a three percent increase - to account for all the additional value that you are providing your clients with compared to last year.

The second reason is that you have probably taken a number of professional development courses, seminars, and conferences. If you are a member of the IPBC, you have probably participated in our exclusive member forums, where people ask all kinds of interesting questions, and experienced bookkeepers and accountants effectively mentor less experienced bookkeepers. The third reason your fees should increase is that you have one more year's worth of experience.

You are now smarter, more efficient, you've learned new practices, and you've become more efficient. You can enter transactions faster, you can move around your accounting software quicker and you know more than you did a year ago. In short, you are more valuable to your clients. So why haven't you increased your rates each year to keep pace with the additional value you can create for your clients?

Will Your Clients Leave Because You Raise Your Rates?This is the $64,000 question for most bookkeepers. Like other professionals, most bookkeepers are afraid to raise their rates. They say that they will lose clients. My experience has been that any client that is being well serviced by a bookkeeper is not going to switch bookkeepers because of rate increases. Clients are not very price sensitive if they feel like they are getting good value.

Now, if you don't return calls and e-mails in a timely fashion, or you often miss deadlines, any increase in rates might just be the straw that broke the proverbial camel's back. All the research supports this. In a recent survey on why people leave accounting firms, the number one reason was because they didn't feel like their accountant cared about them. They were not getting the kind of service that they expected, so they left. Fees and fee increases were far down the list in number eight or nine position in the top ten reasons for leaving.

It’s All About ConfidenceIn professional services, the following statement is absolutely true: You can charge what you think you are worth. It's all about confidence. If you are confident about the value that you bring to the table, your clients will pay whatever you charge them (so long as they are not surprised by the size of the bill - so set expectations appropriately, communicate often, bill small amounts frequently (at least monthly) and don't be afraid to tell clients that their file is a mess and requires a lot of clean up or that the way they provide source documents makes it hard for you to keep their costs down. Up-front, open and honest communication is the key to avoiding disputes about your bills.

For the last month, I have been traveling around to various small cities and towns in B.C. and Alberta interviewing bookkeepers. I recently met two bookkeepers, both with similar experience and skills. They both had roughly the same client base, and did roughly the same type and amount of work. One was charging almost twice the hourly rate of the other - and the only difference I could find was confidence. One of the bookkeepers believed that she was worth more, so that is what she charged, and that is what her clients paid. It's that simple.

Building ConfidenceNow, what can you do to build your confidence in your value? First, get some credentials. Become a Certified Professional Bookkeeper through the IPBC; Become a QuickBooks ProAdvisor or a Simply Certified Consultant (Bronze, Gold or Platinum); Take the Payroll Compliance Course through the Canadian Payroll Association.

Second, pick up the pace of your professional development. Take bookkeeping courses through the Knowledge Bureau , your local community colleges, or Universal Accounting. Learn to become more efficient by upgrading your technology knowledge. Attend the Alan Salmon technology tour, take QuickBooks training through Eileen Reppenhagen's courses atwww.taxdetective.ca (IPBC members get a significant discount), or take our upcoming Excel classes this fall. Anything you can do that will help increase the value you can offer to clients and build your confidence in that value will help.

Third, make your practice more efficient. Create some leverage, increase your efficiency, develop better systems, make better use of technology, etc. There are a variety of free online seminars to help you increase your utilization of technology - and your bookkeeping program.

How To Raise Your RatesOK, so now that you are convinced that you should increase your rates - how do you actually do accomplish this task? Well most people have been fairly successful by sending out notice of rate increases to their clients - prior to raising their rates. So long as they are notified enough in advance, and the letter is professionally done, most clients won't have a problem - they will accept it as a normal business practice. If anyone does take issue, for the most part, they will be people who are not feeling particularly well serviced. The complaint about fees is really a complaint about service in disguise. If you hadn't raised your rates, they may never have said anything, and now you will have the opportunity to address the issue with them and turn them into loyal clients.

ConclusionSo raise your hourly rates. Do it as soon as possible and do it every single year. Train your clients to expect that like everyone else’s prices, yours will go up every year. You’ll be able to make more money and maybe work a few less hours. Why wouldn’t you?

Gordon Holley, CA, CFP, CPBPresident & CEOBookkeeping Express

Gordon Holley is an entrepreneur at heart. He’s worked as a CFO advising start-ups, as a law firm Chief Operating Officer, and as a partner in a CA firm. While working in public practice in small, mid-size and "Big 4” CA firms, Gordon got a real insider's look at how bookkeeping affects both accountants and small business owners. In all his roles, he has demonstrated a keen eye for business opportunities.

Now, as President and CEO at Bookkeeping Express, he brings hard-won experience and insight from more than 20 years in accounting and financial services to his own bookkeeping franchise company. As a business owner, Gordon can now focus on the work he enjoys the most, like connecting with small business owners and accountants, and helping other bookkeepers grow their own successful bookkeeping businesses.

Gordon is a Chartered Accountant, a Certified Financial Planner, a Certified Professional Bookkeeper, a Certified QuickBooks ProAdvisor and a Simply Accounting Gold Certified Consultant. He is a member of the Institute of Professional Bookkeepers of Canada (he is currently President of the IPBC), the National Association of Certified Professional Bookkeepers (US) and the American Institute of Professional Bookkeepers (US). Gordon brings years of experience participating on non-profit, professional association boards, including the Vancouver Association of Legal Administrators and the Canadian Society for Marketing Professional Services.